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Technology

China 5G to drive first smartphone shipment rise in four years

IDC projects 1.5% increase in 2020 as market awaits Apple's entry

Huawei's 5G phone: IDC says "recent developments in China" prompted it to raise its short-term smartphone forecast.   © Reuters

TOKYO -- The global smartphone market will grow for the first time in four years in 2020 thanks to China's aggressive rollout of fifth-generation mobile networks, according to the latest forecast by U.S. research company IDC.

Shipments are expected to increase 1.5% from 2019 projections to 1.4 billion devices after three years of declines, IDC said in a news release on Tuesday. After reaching a record high of 1.47 billion in 2016, shipments fell 0.3% in 2017 and 4.3% in 2018, and are expected to slump by another 1.4% this year.

Now, China is paving the way for a turnaround. "Recent developments in the China market along with anticipation of aggressive activity from the smartphone supply chain and OEMs have caused us to raise our short-term 5G forecast," said Ryan Reith, program vice president with IDC's Worldwide Mobile Device Trackers.

IDC expects 190 million 5G smartphones to ship in 2020, accounting for 14% of the total.

The research company said the market's slump over the past few years has left smartphone makers little room to raise price for 5G handsets. Android vendors are expected to drive down the cost of 5G products starting with first-quarter announcements.

Apple's entrance into the 5G game, expected to come in September 2020, will be closely watched for its effects on pricing and market availability, IDC added. "We are very confident that 5G smartphone prices will come down quickly in order for this market segment to grow," Reith said.

The upbeat projections for China come despite slower-than-expected demand for 5G in Australia, Japan and South Korea as well as some European countries.

"Shipments so far in the second half of 2019 have come in much lower than expected and price points are not quite at the premium," said Sangeetika Srivastava, senior research analyst with IDC's Worldwide Mobile Device Trackers. "Accelerated 5G adoption globally will depend a lot on factors like the arrival of 5G networks, operator support, as well as substantial price reductions to offer more affordable 5G devices."

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